13-1151r HRA RESOLUTION NO. 1151
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION APPROVING FIRST AMENDMENT TO FUNDING AGREEMENT AND
AMENDED AND RESTATED BUSINESS SUBSIDY AGREEMENT BETWEEN THE
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA AND LYNDALE GARDENS LLC
WHEREAS, Minnesota Statutes, Section 469.176, Subd. 4m (the "Temporary TIF
Authority Act") authorizes the Housing and Redevelopment in and for the City of Richfield
(the "Authority") to spend available tax increment from any existing tax increment financing
district, notwithstanding any other law to the contrary, to provide improvements, loans,
interest rate subsidies, or assistance in any form to private development consisting of
construction or substantial rehabilitation of buildings and ancillary facilities, if certain
conditions are met; and
WHEREAS, at its meeting on July 25, 2011, the Authority approved a spending plan
related to certain tax increment districts in accordance with the Temporary TIF Authority
Act (the "Spending Plan") to utilize existing tax increment revenues from the tax increment
districts in order to stimulate construction or rehabilitation of private development in a way
that will also create or retain jobs; and
WHEREAS, the assistance authorized under the Spending Plan expressly included,
but is not limited to, assistance to Lyndale Gardens LLC, a Minnesota limited liability
company (the "Developer") to finance the costs of redeveloping the Lyndale Garden
Center, located at 6430 - 6400 Lyndale Avenue South (the "Development Property") in the
City if Richfield (the "City"), which costs include the acquisition of the property, the
remediation of environmental contaminants and the substantial rehabilitation of the existing
building so that it is suitable for commercial use (the "Project"); and
WHEREAS, on August 15, 2011, the Board of the Authority approved a Funding
Agreement, between the Authority and the Developer (the "Funding Agreement"), pursuant
to which the Authority provided $650,000 of the funds available under the Spending Plan
to the Developer to help finance the Project under certain terms and conditions; and
WHEREAS, on August 15, 2011, the Board of the Authority also approved a
Business Subsidy Agreement, between the Authority and the Developer (the "Original
Subsidy Agreement"), which set forth the terms and conditions of the business subsidy
provided to the Developer pursuant to the Funding Agreement; and
WHEREAS, financial assistance provided to the Developer pursuant to the Funding
Agreement consisted of a grant in the amount of $335,000 and a forgivable loan in the
amount of$315,000 to help finance the Project; and
WHEREAS, in order for the loan of $315,000 to be forgiven, Section 2.05 of
Funding Agreement requires that the following occur prior to September 1, 2014: (i) the
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Developer provides the Authority with sufficient evidence that the rehabilitation activities
described in Schedule A of the Funding Agreement have been completed; (ii) the Authority
and the Developer enter into a contract for private redevelopment providing for the
redevelopment of the Lyndale Garden Center property and possibly adjacent lands, and
for the use of tax increment to assist in the payment of qualifying activities; and (iii) the
Developer provides the Authority with written evidence, in the form of a certificate from the
construction manager of the rehabilitation activities, that 25 jobs were created by the
rehabilitation activities; and
WHEREAS, the Authority and the Developer previously entered into that certain
Contract for Private Development, dated November 21, 2011, pursuant to which the
Developer agreed to acquire the Development Property and to construct the Project; and
WHEREAS, the Developer has provided evidence to the Authority that at least 25
jobs were created by the rehabilitation activities it has performed with respect to the
Project thus far; and
WHEREAS, pursuant to the Original Subsidy Agreement, the Developer must (i)
secure completion of the Project, (ii) ensure that the Project is operated for at least five
years after completion, and (iii) remedy the blight on the Development Property; if the
Developer does not complete these actions, it must repay the financial assistance provided
under the Funding Agreement in the amount of $650,000; and
WHEREAS, the Developer has proposed the Funding Agreement and the Original
Subsidy Agreement be amended so that the scope of the Project includes both the
acquisition and substantial rehabilitation of the Lyndale Garden Center (as described in the
Funding Agreement), or in the alternative, the demolition of the Lyndale Garden Center
and the construction of an approximately 30,000 square foot retail building which is
expected to house a cooperative grocery store; and
WHEREAS, given the new direction the Project has taken, the Developer has
further proposed that the Developer be provided a one year extension to satisfy the
requirements for forgiveness of the Loan set forth in Section 2.05 of the Funding
Agreement; and
WHEREAS, the Board of the Authority has been presented with a First Amendment to
Funding Agreement (the "First Amendment to Funding Agreement"), between the Authority
and the Developer and an Amended and Restated Business Subsidy Agreement (the
"Amended and Restated Subsidy Agreement"), between the Authority and the Developer;
and
WHEREAS, the Authority has reviewed the First Amendment to Funding Agreement
and the Amended and Restated Subsidy Agreement and finds that the execution thereof by
the Authority and performance of the Authority's obligations thereunder are in the best
interest of the City and its residents; and
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. The First Amendment to Funding Agreement and the Amended and Restated
Subsidy Agreement presented to the Authority and on file with the Community Development
Director are hereby in all respects approved, subject to modifications that do not alter the
substance of the transaction and that are approved by the Chairperson and Executive
Director; provided that execution of such documents by such officials shall be conclusive
evidence of approval.
2. The Chairperson and Executive Director are hereby authorized to execute the
First Amendment to Funding Agreement and the Amended and Restated Subsidy Agreement
on behalf of the Authority and to carry out on behalf of the Authority the Authority's obligations
thereunder.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 18th day of March, 2013.
Suza M. Sandahl, Chair
ATTEST:
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Doris Rubenstein, Secretary